Invest Like the Best with Patrick O'Shaughnessy
01:16:32 · Patrick O'Shaughnessy, Micky Malka
[01:16:32] S0: If you think back on Ribbit's whole history, the firm, let's pretend that you had to go start Ribbit two point o for whatever reason. Ribbit disappears. You gotta start Ribbit two. What mistakes from your history at Ribbit would make you most prepared to do an even better job in Ribbit two? And I'm sure these are all things that you're doing anyway, but that's a fun thought exercise. [01:16:53] S2: Wow. I thought you had asked me really hard questions. This is hard. I will say for as much as I told you about concentration, I will even be more concentrate, even more so. Wow. I try to correct that on a daily basis. Definitely a lot more concentrated. And the other mistakes that I'll probably correct on Ribbit two, I think we already are on Ribbit two, so maybe Ribbit three is it's probably the use of our time. The more time we spend in getting to know founders and spending time with them, like really getting to know them and become trusted, the more valuable and the more joy we have. So even though I feel really good that we have a bunch of friends and the best metric of that is that almost every founder that we've backed has later become an LP or an investor in our funds just because of that relationship, I will still double down and spend even more time with them. [01:17:57] S0: Say a little bit more about the conviction one. I think of you as a pretty concentrated investor. Why even more?
01:17:57 · Patrick O'Shaughnessy, Micky Malka
[01:17:57] S0: Say a little bit more about the conviction one. I think of you as a pretty concentrated investor. Why even more? [01:18:03] S2: Because the impact you can have is limited by the amount of people that you can touch. And the more concentrated you are there, the more impact you can have and the more present you can be. And I think, for example, if we do a good job on understanding the grid and we do thesis driven work on what needs to happen there, how do we solve identity first and how do we do this? And we find the one or two or three things that matter the most on identity, we should do that and not do anything else. And then think about the second chapter of The Grid and then do the same. But you don't have to do 50 things to express that opinion. And I think that's where it gets diluted. It's not us, but I will even do less. [01:18:43] S0: What unexpected plot twist in the story turned out to be a great blessing?
01:18:43 · Patrick O'Shaughnessy, Micky Malka
[01:18:43] S0: What unexpected plot twist in the story turned out to be a great blessing? [01:18:49] S2: Oh my god. So many. For example, 2022, when everything started to blow up, the attention to this space died. Two thousand and twenty to twenty two was probably five years condensed into two because of COVID and lockdowns did so much to this space that accelerated everything. If we hadn't had air to breathe then and to take time to think, we would have made a 100 mistakes. So the plot of actually the market slowing down dramatically was one of the best blessings we had because we saw that FinTech was dying. And if we hadn't stopped, we wouldn't have seen it. We would have missed it and make a lot of mistakes. So you have to bless market cycles when they give you time to think And embrace it as a moment to think versus trying to say, Oh, momentum is gone. [01:19:42] S0: I remember a conversation we had then, I think it was the first time we ever met. And you said, I'm not an investor right now, I'm a risk manager. And it's such an interesting time. That was the beginning of now of this new foundation that you're building on. So cool to think back on. What makes you emotional in all of this? In a [01:19:58] S2: good way or bad way? [01:19:59] S0: I'm curious about both.
01:19:59 · Patrick O'Shaughnessy, Micky Malka
[01:19:59] S0: I'm curious about both. [01:20:01] S2: In a bad way, it's when somebody lies. I have no room for lying of any kind. My way of being, the way we're at home with our kids, we embrace mistakes. We embrace multiple mistakes, but never lying. Lying is the one thing that really just gets me emotional. I always start by trusting everybody 100%. And all you can do is lose the trust. There's people that are the opposite. They give zero trust and as I get to know you, you get to 100% or maybe 50%. I always start at a 100. And that part emotionally drains me, takes away my energy when there's lying. What gives me energy and when do I get emotional is when I see people around me having joy. When you see that they're doing what they're meant to be doing. When you see that they wake up and they are asking and they're learning and they're interacting and they're building what they wanna build, that gives me joy. And the younger they are, the more joy I get.
01:20:01 · Micky Malka, Patrick O'Shaughnessy
[01:20:01] S2: In a bad way, it's when somebody lies. I have no room for lying of any kind. My way of being, the way we're at home with our kids, we embrace mistakes. We embrace multiple mistakes, but never lying. Lying is the one thing that really just gets me emotional. I always start by trusting everybody 100%. And all you can do is lose the trust. There's people that are the opposite. They give zero trust and as I get to know you, you get to 100% or maybe 50%. I always start at a 100. And that part emotionally drains me, takes away my energy when there's lying. What gives me energy and when do I get emotional is when I see people around me having joy. When you see that they're doing what they're meant to be doing. When you see that they wake up and they are asking and they're learning and they're interacting and they're building what they wanna build, that gives me joy. And the younger they are, the more joy I get. [01:21:04] S0: We had an interview on the platform of Steve Young, the quarterback recently, and he talked about this part of his life when he realized that he was part of the 49ers at the time, which was the first place he called it a platform he had ever been that allowed him to experiment with how good he could be and that supported him in that and taught him agency, which is basically what you're saying now. How do you do that? What are the literal things you do to create the environment for the young people here to have that experience of agency and what it might be like to find the thing they're meant to do. What are the things you do to promote that?
01:21:40 · Micky Malka
[01:21:40] S2: I incentivize all of them to try different stuff and try different experiments and go meet different people. We incentivize them to go deep in an area of any kind of area that they wanna go as long as they come back and share the knowledge. And if they can articulate it, then they're learning. The other thing you do is you put them in positions to allow them to experience that. Most people are afraid of sending somebody who's 25 or 26 to a meeting because they're afraid what they're gonna say. You cannot be afraid. You gotta do it. And if they make a mistake, own it. Use it as a teaching moment. So we've had many teaching moments. We had great stories here of all kinds. We had great outcomes, but we had teaching moments. And we always talk about the teaching moments. And we have a wall with all of the moments that are like that, where we stick these things and we leave them in prosperity so people learn from it. That's a great story, Mickey is gonna love me to say. When we started, he had this passion for this idea of this business in the early days, and we were just starting and he was so convinced and he was enamored. He put so much time. He gave him a million dollar check to this company to start and do all these things. And I was never convinced from day one. And I don't know, it's not about right or wrong. It was just... But you let them do. Your risk management is, can we afford that kind of bet? The answer is yes. That's a teaching moment. We'll see what it brings. Long story short, the company doesn't end up working, and we get a check back for 93¢. So we never cash the check, but we frame the check. And it's framing this wall as a reminder of a story that works like that. It's not dissimilar than Berkshire Hathaway, keeping the name of the two companies that he took bankrupt because that was his first business. It's just reminders of who you are like that. And so we embrace a lot of those.